How Will the Government Shut Down Affect Mortgages?

Here we are several days into a government shutdown and many people are wondering what impact that will have on real estate, the housing market, and the mortgage process. For many people, dealing with the government shutdown interrupts our life in several ways and can cause financial stress. If you are in the middle of buying a home you can be caught in the political tug-of-war and stress levels can get out of hand. The unpredictable nature of our current political environment can make some uneasy and it’s not always possible to get in front of a shutdown.

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The IRS ceases operations during a shutdown and obtaining a request for tax transcripts can be impossible. Most loans require these documents prior to funding and when a shutdown occurs and we haven’t ordered or processed the documents, it can put a halt on the mortgage process.

Many home loans require a Social Security number verifications and the Social Security Administration may not work or operate as usual and this can slow down the process as well.

FHA, USDA, and VA loan processing still continues to operate it but with a type of “skeleton crew”. Delays are to be expected and sometimes the USDA loan department shuts down entirely.

Most loans require verification of employment and if the borrower is a government employee, this might be difficult or impossible to gather until normal operations resume.

It can be very frustrating for all parties involved but when we take our emotions out of the situation and try to look at the facts and what we can do in the meantime, we can make the process wrap up much quicker once a government shutdown ends. All parties may need to make adjustments in order to keep things going along smoothly. There’s almost little we can do to fight against the government so keeping our heads during this time is one of the best options.